- The US Dollar strengthens against major currencies this Tuesday, supported by market optimism ahead of key US economic data later in the week.
- The US Dollar Index rises above 99.00, aiming for the 100.00 milestone.
The US Dollar Index (DXY), which measures the Greenback’s strength against six major currencies, is holding modest gains around 99.40 this Tuesday. The dollar’s rise accelerated late in Asian trading following comments from the Japanese Ministry of Finance (MoF) about reducing bond issuance volumes, causing Japanese yields to fall and the Yen (JPY) to weaken against the Greenback. This triggered a domino effect, boosting the US Dollar against several other major currencies.
While markets remain optimistic about a potential US-EU trade deal in the coming days, attention now shifts to key US economic data releasing this Tuesday after the Memorial Day holiday. Traders will closely watch April’s Durable Goods Orders and May’s Dallas Fed Manufacturing Business Index, which offers insight into the manufacturing sector’s health amid ongoing tariff impacts.
Daily Digest Market Movers: US Durable Goods Orders and Key Data Ahead
- Today at 12:30 GMT, the US Durable Goods Orders report for April is set for release, with expectations of a 7.9% decline following a strong 9.2% rise in March.
- Excluding transportation, Durable Goods Orders are forecast to slip slightly by 0.1%, down from flat in March.
- Later at 14:00 GMT, the May US Consumer Confidence figure will be published, though no forecast is currently available; the previous reading was 86.0.
- At 14:30 GMT, the Dallas Fed Manufacturing Business Index for May is due, with no forecast available after a sharp fall to -35.8 in the prior month.
- Equity markets show modest gains across Asia and Europe, while US futures surge ahead of the session, with all three major indices up over 1.5%.
- The CME FedWatch Tool signals a very low 2.1% chance of a Federal Reserve interest rate cut in June, though the probability rises to 24.4% by the July 30 meeting.
- Meanwhile, the US 10-year Treasury yield continues to decline, currently at 4.45%, down from last Thursday’s peak of 4.62%.
US Dollar Index Technical Analysis: Mixed Signals Ahead
The US Dollar Index (DXY) is showing early signs of a rebound after a prolonged period of weakness, with momentum building this Tuesday following tentative moves on Monday. The DXY is likely to test resistance levels, but any strong push higher may face rejection, potentially triggering a drop below the May lows and renewed weakness for the Greenback.
Key resistance points to watch are the 100.22 level, which capped gains in September and October, followed by the broken ascending trendline near 100.80. Beyond that, the 55-day Simple Moving Average (SMA) at 101.32 and the December 2023 pivot at 101.90—also the base of an inverted Head-and-Shoulders pattern formed in summer 2024—are crucial. Should bulls break these levels, the pivotal 103.18 mark will be the next hurdle.
On the downside, renewed selling pressure could push the DXY towards the year-to-date low of 97.91 and the important support at 97.73. Further technical support lies at 96.94, with lower targets at 95.25 and 94.56, potentially marking fresh lows not seen since 2022.
